A federal judge in Florida has dismissed a class-action lawsuit against Mark Cuban and the Dallas Mavericks, which accused them of misleading investors by endorsing Voyager Digital. The judge ruled on December 30, stating that all allegations of securities law violations and consumer fraud were dismissed “in its entirety.” This ruling effectively prevents the plaintiffs from refiling the case in that jurisdiction.
The legal action followed the bankruptcy of Voyager in 2022, which was a significant event linked to the broader downturn in the cryptocurrency market, notably exacerbated by the collapse of the Terra blockchain. Voyager reported approximately $1.3 billion in crypto assets on its platform before seeking Chapter 11 bankruptcy protection.
The plaintiffs claimed that Cuban had misrepresented Voyager”s stability and potential before the company collapsed. However, the ruling by US District Judge Roy K. Altman leaves them without options to pursue the case in Florida.
According to Steve Best, lead counsel for Cuban and the Mavericks, the legal team expressed satisfaction with the outcome, suggesting that the plaintiffs may seek to file in a different jurisdiction. Best stated, “I look forward to defending Mark and the Mavericks in any jurisdiction in this country.”
This lawsuit is part of the aftermath of the turbulent 2022 cryptocurrency market, which saw significant losses that stemmed from Terra”s failure, wiping out around $40 billion in market value. The founder of Terra, Do Kwon, recently received a 15-year prison sentence for conspiracy to defraud and wire fraud, following his admissions of misleading investors regarding the depeg of TerraUSD.
As the cryptocurrency landscape continues to evolve, this ruling may set important precedents for how celebrity endorsements and promotional activities are treated under securities laws.
